Independent Marketers Accept Blame for Fuel Scarcity

  • FG to end sharp and unfair practices in oil and gas
    Text Box: Saudi Arabia moves to reduce Iran’s oil exports

Ejiofor Alike in Lagos and Chineme Okafor in Abuja with agency reports

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has exonerated the federal government of any blames associated with the current lingering fuel shortages across the country, clarifying that Nigerians should rather blame the prolonged leadership crisis that had rocked the association as the cause of the crises.

The association also said the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, should not be held responsible for petrol scarcity as their nearly two years of fighting over leadership positions in the association had contributed maximally in the current petroleum product scarcity.

According to the Interim Management Secretary of IPMAN, Mr. Lawson Ngoa, the rivalry between two IPMAN national factions has crippled the importation and distribution of petroleum products in Nigeria especially by independent marketers who control about 80 per cent of the fuel distribution network.

Ngoa explained in Abuja that Kachikwu had only intervened to end the crisis in his resolve to end the current fuel scarcity and could not be blamed for it.

He noted Kachikwu in trying to reconcile the factions and revive sanity in their operations, inaugurated IPMAN reconciliation and interim management committee to resolve the crisis and how it contributes to scarcity of petroleum products.

While shielding Kachikwu from the blame, Ngoa stated in a statement that the minister is completely innocent of the petroleum products scarcity as he inherited a crises ridden petroleum sector.

He further stated that IPMAN accepts all responsibility for the difficulties suffered by Nigerians while agreeing that IPMAN is now ready to commence distribution of products following the reconciliation brokered by Kachikwu.
“With the increase in percentage of product to IPMAN and other incentives made available by the federal government through the minister of petroleum, the fuel scarcity will end in weeks,” said Ngoa.

He urged all Nigerians to support the federal government and the minister of petroleum to end the scarcity.
Also speaking on the fuel scarcity, the Chief Operating Officer (COO) Downstream of the Nigerian National Petroleum Corporation (NNPC), Mr. Henry Ikem Obih, has said that it would take the cooperation of all stakeholders in the country’s downstream petroleum sector to clear out the lingering queues for fuel at filling stations in the country.

Obih, who said more cargoes of petroleum products had been pumped into the market, explained that until everyone in the value chain honestly play their roles in the supply and distribution of petrol in the country, the long queues of vehicles waiting to buy fuel would not vanish.

He said that the NNPC alone would not be able to end the scarcity because it does not have all that is necessary to do that under its control.

According to him, instances of products diversions and operators’ reported reluctance to discharge and sell fuel allocated to them on time were noticed at some of the stations he inspected.

He said that such cases should be taken up and investigated by the Department of Petroleum Resources (DPR) to discourage the practice of operators’ preference for black market sale of petrol across the country.
Meanwhile, the federal government is set to reverse any decision made in the oil and gas sector, which is contradictory to the laws of the country.

The government’s commitment against fleece came through the Comptroller-General of Nigeria Customs Service, Col. Hameed Ibrahim Ali, who upon hearing that the nation had been losing $1.5 billion annually due to illegal monopoly by an oil servicing company, said President Muhammadu Buhari’s administration would stamp out all unwholesome practices that are inimical to the economic interest of the country.

Ali’s remark is coming in the wake of a revelation by the Chairman of Snake Island Integrated Free Zone (SIIFZ), Mr. Anwar Jarmakani that the country was losing between $3 and $5 on every barrel of oil produced, or $1.5 billion yearly to non-existent laws, which conferred monopoly to an unnamed oil and gas logistics provider in the country.
The NCS boss, who visited Nigerdock Yard at Snake Island in Lagos on Monday, further stated that Buhari’s government stood for equity, justice and fairness, adding that the NCS had no choice than to work along the path of the administration.

“In the past, certain things were done but not in accordance with the laws. I can assure you that if we find anything contradictory to the laws, we will correct it. It is our responsibility to ensure that investors and every player succeeds in Nigeria as we look forward to a successful Nigeria. President Muhammadu Buhari’s government is a government of equity, fairness and justice. If we see things that were not done in accordance with the laws, we will correct it,” Ali said.

The NCS boss, who said he was impressed with the huge investments in the Snake Island free zone, assured that the federal government would do everything possible to encourage more investments in the zone and create more job opportunities for Nigerians, in line with the administration’s commitment to create jobs.

In his speech, Jarmakani, who is also the Chairman of Jagal Group, owners of Nigerdock, said a dominant monopoly in Nigeria’s oil and gas, as well as supply services had existed for over 20 years, “sabotaging the national economy, conspiring and working against any potential competitors, particularly against Snake Island Integrated Free Zone”.
He said the monopoly had consistently and aggressively used different government institutions to entrench its position with impunity.

“Regrettably, attempts have been made in the past to also use the Nigeria Customs Service. We, therefore appreciate the fact that the present administration is aggressively doing away with such impunity,” he added.
Jarmakani added that this monopoly has damaged Nigeria’s international reputation, while oil and gas supply and logistics service in the country has become the most expensive in the world because of this monopoly.

According to him, this monopoly has over the last 20 years used a non-existent law to justify the assertion and false claim that “all oil and gas cargo must first be discharged at their ports of preference.”
He noted that the number of ports owned by this monopolist had increased from one to five.

On the global scene, as Iran’s decision to increase her crude oil exports to four million barrels per day before joining a global agreement on freezing production continues to threaten the global output freeze deal, Saudi Arabia has taken steps to slow Iran’s efforts at increasing exports by banning vessels that transport Iranian crude from entering their waters.

Production freeze is aimed at checking the inflow of oil into the market, a strategy designed by oil producers to shore up the tumbling price of the commodity that is the mainstay of the Nigerian economy.

With the low oil price adversely affecting the Nigerian economy and rousing the country to pay more attention to other sources of income, the federal government said on Monday that it would end all sharp and unfair practices that had been fleecing the nation’s purse.

Iran had decided not to join the coalition for production freeze until its export target of four million barrels per day was achieved, a position that tallied with that of Russia, which also planned to export more crude oil to Europe in April than it had exported in any month since 2013, thus threatening a global agreement aimed at lifting the price of crude.

Financial Times reported that Iran already faces insurance, financing and legal obstacles despite the lifting of sanctions linked to its oil industry in January.

Under a nuclear deal with world powers, Iran was allowed to resume crude exports to Europe and other destinations.
But since the lifting of sanctions, Iran has managed to sell only small volumes of crude to Europe, including barrels to Spain’s Cepsa, Total of France and Russia’s Litasco.

By mid-April, only about eight tankers will have sailed from Iran’s Kharg Island for Europe, said shipbrokers, with only 12 million barrels booked to sail.

Iranian vessels carrying the country’s crude are restricted from entering ports in Saudi Arabia and Bahrain, according to a circular sent by a shipping insurance company to its members in February.

The notice said ships that have called to Iran as one of its last three ports of entry will also require approval from the Saudi and Bahraini authorities before entering their waters. Shipbrokers and traders have relayed the same messages since.

Iran is also yet to regain access to storage tanks at a key oil transit hub on Egypt’s Mediterranean coast, which is part-owned by Saudi Arabia Oil tanker association, Intertanko, and other industry participants say no formal notice has been given by Saudi Arabia but uncertainty is making some charterers less willing to lift Iranian crude.

Diplomatic tension between Saudi and Iran, which worsened during the bloody conflict in Syria, is seen influencing the commercial sphere with both countries battling for market share amid the collapse in oil prices.
OPEC and Non-OPEC members are set to discuss plans to freeze output on April 17 — the first concerted action to halt an oil price rout that has shredded producer countries budgets.

But last week, Deputy Crown Prince Mohammed bin Salman said Saudi Arabia would not hold output steady unless joined by Iran, which has said it plans to regain its post-sanctions output level before agreeing to any freeze.
Part of the slow increase in exports to Europe has been the lack of access for Iran to facilities operated by the Arab Petroleum Pipeline Company, known as SUMED.

Before the imposition of sanctions Iran used to send crude from the Red Sea to the Mediterranean on the company’s lines.

The facility is 50 per cent owned by Egypt, with Gulf Arab allies Saudi Arabia, Kuwait and the UAE together owning 45 per cent.